by Martin Oduor
The Co-operative Bank Group has reported a Profit before Tax of Kshs 4.5 billion for the first quarter of 2017 – a commendable performance against the backdrop of a tighter operating environment especially with the capping of interest rates and currency devaluation and hyperinflation on our operations in South Sudan.
Profit after tax was Kshs. 3.2 billion compared to Kshs. 3.4 billion the previous year, a slight drop of 6%.
The strong Group performance is riding on the remarkable gains from the ‘Soaring Eagle Transformation Agenda’ that has closely focused on improving operational efficiency, superior customer service and lower operating costs; The Group has remarkably reduced the overall operating costs with a Cost Income Ratio of only 47.9% this quarter, compared to a ratio of 52.1% similar period last year and a high of 60% in 2014.
Key financial highlights include;-
- Balance sheet
- Total assets grew by Kshs 27.7 billion (+7.9%) to Kshs. 378.5 billion compared to Kshs 350.7 Billion in the same period last year.
- Net loans and advances book grew by Kshs 32.2 Billion (+15%) to Kshs. 245.9 billion compared to Kshs. 213.7 Billion in the same period last year.
- Customer deposits grew by Kshs. 18.1 billion (+6.9%) to Kshs. 279.8 billion compared to Kshs. 261.7 billion in the same period last year.
- Shareholders’ funds grew from Kshs. 55.3 billion to Kshs. 63.8 billion, an impressive growth of 15.4%, supported by a steady growth in retained earnings and a progressive dividend policy.
- Profit & Loss
- Total interest income reduced by 10.8% from Kshs 10.7 billion in 1Q2016 to Kshs 9.5 billion in 1Q2017.
- Total interest expense reduced by 26.9% from Kshs 3.9 billion in 1Q2016 to Kshs 2.8 billion in 1Q2017on account of reduced cost of funding.
- Total operating income reduced marginally by 1.8% from Kshs 10.3 billion in 1Q2016 to Kshs 10.1billion in 1Q2017.
- Interest income from loans & advances declined by 7.7% despite the15% increase in net loans & advances.
- Innovative Customer Delivery Platforms
- A successful Universal Banking model and the implementation of Sales Force Effectiveness has seen the Group serve 6.39 million Account-holders across all sectors supported by our multichannel strategy that includes 149 Branches, over 8,000 Co-op Kwa Jirani Banking Agents and over 580 ATMs.
- The all-telco Mco-op Cash Mobile Wallet has continued to play a pivotal role in the growth of non-funded income with over 3.21 Million customers.
- Through our multi-channel strategy the Bank has successfully moved 88% of customer transactions to alternative delivery channels particularly mobile banking, ATMs, internet and Co-op Kwa Jirani bank agency outlets.
- Our unique model of retail banking services through Sacco FOSAs enabled us provide wholesale financial services to over 550 FOSA outlets. The bank has currently issued over 1MSacco link cards.
- We continue with our focus on Digital Bank which will ensure timely, business-led solutions delivery to our customers.
4. Regional Expansion
Co-operative Bank of South Sudan that is a unique Joint Venture (JV) partnership with Government of South Sudan (Co-op Bank 51% and GOSS 49%)made a loss of Kshs. 34.7 Million in the period under review owing to hyperinflation occasioned by devaluation of the South Sudanese currency.
- Corporate Social Responsibility Programs
Co-op Bank Foundation has provided Scholarships for gifted but needy students from all counties in Kenya. The sponsorship includes; fully paid secondary education, full fees for University education, Internships and career openings for beneficiaries. The foundation is fully funded by the bank and has so far supported 5,089 students since the inception of the program in 2007.
The Bank through Co-op Consultancy has a dedicated team of over 13 consultants offering critical advisory services to the co-operative movement.
“The massive investments in the economy in terms of infrastructure, ICT, Energy Generation and Human Capital has seen the economy attract increased inflows of Foreign Direct Investments. Co-op Bank is well positioned to ride on the expected upswing of the economy after the August elections leveraging on our strong balance sheet, a cost effective operating structure and a highly motivated team,” said Co-op Bank Group Managing Director and CEO Dr. Gideon Muriuki.
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July 1, 2022
July 1, 2022